Kubilius shrugs off Gazprom demand

Mar 09, 2010
TBT Staff

The Russian gas company said it would be willing to file for international arbitration if the Lithuanian government didn't cover their losses in the country.

VILNIUS - Lithuanian Prime Minister Andrius Kubilius has said that the government should not be held directly accountable after receiving a letter from Russian gas giant Gazprom demanding about $135 million in compensation.

Gazprom - Russia's state owned energy monopoly - sent a letter to the Lithuanian government earlier this week demanding $135 million in compensation. The company claims that the government broke contract on the 2003 sale of Kaunas heat and power plant (KTE) by altering the gas pricing scheme.

"It is estimated that the Russian gas consortium ... lost 342.2 million litas ($134.6 million) due to the Lithuanian government changing the methodology of setting heating prices," the power plant said in a statement on its website.

"Therefore, Gazprom has proposed to reach an amicable settlement with Lithuania ... for it to pay that sum as compensation for the loss suffered."

Kubilius said, however, that the dispute was between Kauno Energija and the KTE - and that the contract did not mean that the state had no right to regulate energy and heating prices or pass relevant laws.

He said the government was a third party in the conflict.

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